Mr. Chairman, on behalf of the private sector solid waste management industry, I appreciate the opportunity to testify today on proposed interstate waste and flow control legislation. I am Bruce Parker, President and CEO of the National Solid Wastes Management Association (NSWMA). NSWMA represents companies that collect and process recyclables, own and operate compost facilities and collect and dispose of municipal solid waste (MSW). NSWMA members operate in all fifty states.
The solid waste industry is a $43 billion industry that employs more than 350,000 workers. We are proud of the job we do and the contribution our companies and their employees make in protecting the public health and the environment. America has a solid waste management system that is the envy of the world because of our ability to guarantee quick and efficient collection and disposal of trash in a manner that fully conforms with state and Federal waste management laws and regulations.
Our members provide solid waste management services in a heavily regulated and highly competitive business environment. Thus, we are critically interested in proposals, such as restrictions on the interstate movement of MSW, that would change that regulatory or competitive environment, increase the cost of waste disposal and threaten the value of investments and plans companies have made in reliance on the existing law.
The message I want to leave with you is this: restricted borders have no legitimate place in managing trash or any other product in our economy. They do not make economic or environmental sense. They are contrary to the concept of open borders; contrary to the evolution to bigger, better, more environmentally sound disposal facilities; contrary to our desire to keep disposal costs for taxpayers low; and contrary to the trend toward more innovative and protective waste management facilities.
In the balance of this statement, I will share with you our reasons for concern and opposition to S. 1194, the “Solid Waste Interstate Transportation and Local Authority Act of 2001.” I will discuss the background and context as we see it, and the flaws in the proposed legislation.
Interstate waste shipments are a normal part of commerce. In spite of all the impassioned language you have heard from a few states denouncing garbage that moves across state lines, the reality is simple: every state except Hawaii exports or imports garbage or both and none are harmed in the process.
According to “Interstate Shipment of Municipal Solid Waste: 2001 Update,” which was released by the Congressional Research Service (CRS) last July, 30 million tons of MSW crosses state borders. This equals approximately 7% of the garbage generated in the United States and less than 11% of what is disposed (generation and disposal estimates are based on the same state solid waste data base used by the CRS in estimating waste imports and exports).
These shipments form a complex web of transactions that often involve exchanges between two contiguous states in which each state both exports and imports MSW. In fact, the vast majority of exported MSW, more than 80%, goes to a disposal facility in a neighboring state. According to the CRS report, 24 states, the District of Columbia and the province of Ontario exported more than 100,000 tons of solid waste last year. At the same time, 28 states imported more than 100,000 tons. Fifteen states imported and exported more than 100,000 tons.
The CRS report documents interstate movements of MSW involving 49 of the 50 states. Forty-six states, the District of Columbia and one Canadian province export and 42 states import. Attached is “Interstate Movement of Municipal Solid Waste” (NSWMA Research Bulletin 02-01) which contains extensive information on this subject, including a map showing the movement of solid waste among the states that is based on the data in the CRS report.
Moreover, while some states are the biggest exporters based on tonnage, several small states and the District of Columbia are highly dependent on waste exports. In addition to Washington, DC, which exports all of its MSW, Connecticut, Illinois, Maryland, Missouri, New Jersey, New York, Rhode Island, Vermont and West Virginia export more than 15% of their solid waste. The reality is that MSW moves across state lines as a normal and necessary part of an environmentally protective and cost effective solid waste management system. Like recyclables, raw materials and finished products, solid waste does not recognize state lines as it moves through commerce. In fact, the United States has benefited both environmentally and economically from the free market for waste disposal and recyclables.
CRS cites a number of reasons for interstate movements. These include enhanced disposal regulations and the subsequent decline in facilities. In addition, CRS notes that in larger states “there are sometimes differences in available disposal capacity in different regions with the state. Areas without capacity may be closer to landfills (or may at least find cheaper disposal options) in other states.”
The CRS report notes that the number of landfills in the US declined by 51% between 1993 and 1999 as small landfills closed in response to the increased costs of construction and operation under the Resource Conservation and Recovery Act (RCRA) Subtitle D and state requirements for more stringent environmental protection and financial assurance. The number of landfills in the early 1990s was nearly 10,000 while today there are about 2,600 and the total number continues to decline as small landfills close, and communities in “wastesheds” turn to state-of-the-art regional landfills that provide safe, environmentally protective, affordable disposal.
Construction and operation of such facilities, of course, requires a substantial financial investment. By necessity, regional landfills have been designed in anticipation of receiving a sufficient volume of waste from the wasteshed, both within and outside the host state, to generate revenues to recoup those costs and provide a reasonable return on investment.
It was widely recognized that the costs to most communities of Subtitle D-compliant “local” landfills were prohibitive. The development of regional landfills was entirely consistent with all applicable law, and was viewed and promoted by federal and state officials and ensuing regulatory policy as the best solution to the need for economic and environmentally protective disposal of MSW.
These regional landfills provide safe and affordable disposal as well as significant contributions to the local economy through host fees, property taxes, and business license fees. Additional contributions to the communities include free waste disposal and recycling services, and in some cases assumption of the costs of closing their substandard local landfills. These revenues and services enable the host communities to improve and maintain infrastructure and public services that would otherwise not be feasible.
The legislation currently proposed on this issue, S. 1194, would radically disrupt and transform the situation I have described. For that reason, as well as the precedential nature of some of the provisions, let me suggest that you consider this legislation in a broader context.
The applicability of the Commerce Clause to the disposal of out-of-state waste is well established by a long line of U.S. Supreme Court decisions spanning more than a quarter of a century. As you probably know, the original decision protected Pennsylvania’s right to export its garbage to a neighboring state. The Court has consistently invalidated such restrictions in the absence of federal legislation authorizing them.
Throughout this period, private sector companies did what businesses do: they made plans, invested, wrote contracts, and marketed their products and services in reliance on the rules which clearly protected disposal of out-of-state MSW from restrictions based solely upon its place of origin.
In this fundamental sense, the interstate commerce in waste services is like any other business, and proposed legislation to restrict it should be evaluated in the broader context of how you would view it if its principles and provisions were made applicable to other goods and services, rather than just garbage.
Consider, for example, parking lots. Suppose a state or local government sought federal legislation authorizing it to ban, limit, or charge a differential fee for parking by out-of-state cars at privately owned lots or garages, arguing that they were using spaces needed for in-state cars, and that the congestion they caused was interfering with urban planning, etc. Or suppose they asked for authority to tell privately owned nursing homes or hospitals that they couldn’t treat out-of-state patients because of the need to reserve the space, specialized equipment, and skilled personnel to meet the needs of their own citizens. Similar examples can easily be identified--commercial office space for out-of-state businesses, physicians and dentists in private practice treating out-of-state patients, even food or drug stores selling to out-of-state customers.
I would hope that in all of these cases, you would respond to the proponents of such legislation by asking a number of questions before proceeding to support the restrictions: What kind of restrictions do you want? Are they all really necessary? Can you meet your objectives with less damaging and disruptive means? What about existing investments that were made in reliance on the ability to serve out-of-state people? What about contracts that have been executed to provide that service? Would authorizing or imposing such restrictions be an unfunded mandate on the private sector providing those services, or on the public sector outside the state that is relying on them? Would such restrictions result in the diminution of the value of property purchased in reliance on an out-of-state market, and thereby constitute a “taking”? Will the restrictions be workable and predictable? I respectfully suggest that you ask the same questions about the proposed legislation involving restrictions on interstate MSW.
The
Proposed Legislation
The proposed legislation, S.1194, fails to protect host agreements and investments. Nor does it preserve an opportunity to enter and grow in a market that demands economic and protective waste disposal. And it also fails to provide predictability about the rules that will apply to interstate shipments of waste. The array of discretionary authorities for governors to ban, freeze, cap, and impose fees, and then change their minds over and over again, promises to result in chaos and a totally unpredictable and unreliable market and waste disposal infrastructure. In the worst case, hasty state action to ban or limit imports could lead to a public health crisis in exporting states if their garbage has no where to go.
NSWMA opposes restoration of flow control because it’s too late to put Humpty Dumpty back together again. In the eight years since the Carbone decision, landfills and transfer stations have been constructed, trucks have been bought, people have been hired, contracts have been written, and both the consumers and providers of waste services have experienced the benefits of a competitive market. These investments and arrangements cannot be undone, nor should they be. The facilities that benefited from an uncompetitive monopolization of local solid waste management have learned to compete in a free market. They have become more efficient and competitive as a result of the rigors of the free market system. Why would anyone want to replace a competitive system with uncompetitive monopolies?
S. 1194 would also restrict the importation of MSW form Canada and in so doing, raises serious questions about American responsibilities under the North American Free Trade Agreement, the General Agreement and Tariffs and Trade and the Canada-U.S.A Agreement on the Transboundary Movement of Hazardous Waste (amended to include solid waste).
MSW may not be everyone’s favorite commodity, but it is covered by the same free trade provisions that protect paper and cars and television sets. If we could close our borders to Canadian solid waste, what would prevent Canada from closing its borders to American hazardous waste? American exports of hazardous waste to Canadian disposal facilities have increased dramatically over the last five years. If Michigan can ban Canadian MSW, why can’t the Canadians be allowed to ban Michigan hazardous waste?
Thank you, Mr. Chairman. That concludes my statement.